CEO pay declines for mid-sized med device firms

Survey also finds 10% CEO pay drop for large firms

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Collaboration teal For the third consecutive year, the Grant Thornton Human Capital Services team (HCS) has collected and aggregated proxy pay data for the medical device and biopharmaceutical industry. The survey reports on executive compensation in medical device and biopharmaceutical organizations with revenues less than $100 million, $100 million - $1 billion, and $500 million - $2 billion. Findings include data on salary, total cash compensation, total direct compensation, and short- and long-term incentive grant level data for the top named executives and 2nd highest paid through 5th highest paid.

In examining year-over-year trends, survey data revealed significant revenue increases in organizations with revenues less than $100 million which can be a contributing factor to the slight increase in CEO compensation. Conversely, while median revenue increased for organizations with revenues between $100 million and $1 billion increased, CEO compensation slightly decreased; this can be attributed to smaller revenue growth at the 75th and 90th percentiles.

For the first time, Grant Thornton’s HCS team has analyzed trends in board of director compensation including annual retainer compensation, cash compensation, equity compensation and total compensation. Compared to historical information available, organizations are transitioning from meeting fee-based compensation to cash-based retainers encompassing total hours spent opposed to those only on meetings.

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Every medical device and biopharmaceutical organization should annually review its compensation programs and assess the structure and type of incentive plans it uses. As the survey found, most industries are characterized by increases in "at-risk" compensation, as companies place more compensation at-risk to ensure pay-for-performance linkage. This linkage is critical in emerging and mature public companies, with scrutiny by shareholder advisory groups influencing the voting patterns of the companies' shareholders and institutional investors.

Need executive compensation guidance? Grant Thornton is here to help. Reach out to our professionals below.

Contact: Eric Gonzaga
Partner, Human Capital Services
T +1 612 677 5336

Elizabeth Klobucher
Manager, Human Capital Services
T +1 612 677 5126